Stock Split

1. Stock splits occur when a corporation issues additional shares of its own stock (without charge) to current shareholders and reduces the par (or stated) value per share proportionately. There is no change in the total book value of the shares outstanding. Thus, the memo entry to acknowledge a stock split is merely a formality. See also reverse stock split and stock dividend. An increase in the number of common shares outstanding resulting from the issuance of additional shares to existing shareholders without requiring payment from the shareholders.